Africa Re posts $16m profit Q1, maintains strong capital position despite headwinds

The African Reinsurance Corporation (Africa Re) has reported its financial results for the first quarter ended 31 March 2026, achieving a profit of $16.0 million, compared to $25.6 million in Q1 2025.

This result represents a 6.4 percent profit margin on reinsurance revenue and reflects resilient operating performance despite lower earned premiums, reduced retrocession recoveries, and weaker investment market conditions.

Net reinsurance service result stood at $30.7 million, while net investment income amounted to $17.5 million.

Reinsurance revenue for Q1 2026 declined to $249.5 million from $262.1 million in Q1 2025, notwithstanding a 9.9 percent increase in gross written premiums under IFRS 4.

The slower translation of written premium growth into IFRS 17 revenue was mainly due to higher reserves for unexpired risks.

Corneille Karekezi, group managing director/CEO of Africa Re, commented on the results, saying: “Our Q1 2026 performance demonstrates the Corporation’s resilience in a quarter marked by softer earned revenue, lower retrocession recoveries and volatile financial markets.

While profitability moderated from a strong prior-year base, and remained within our appetite and forecast, our underwriting fundamentals remain sound, our capital position remains robust, and our diversified business model continues to support long-term value creation.

“We will maintain disciplined underwriting, active portfolio optimisation and prudent investment management as we navigate the rest of the year.”
Reinsurance service expense also reduced by 5.8 percent to $184.0 million, but this was not sufficient to offset the revenue decline, resulting in a marginal reduction in reinsurance service result before retrocession to $65.5 million from $66.8 million in the prior-year.

The net expense from retrocession contracts held increased to $34.8 million from $32.5 million in Q1 2025, primarily due to lower loss recoveries from retrocessionaires during the quarter. As a result, service result before non-attributable expenses declined to $30.7 million. Non-attributable expenses remained stable at $5.6 million.

Meanwhile, a modest improvement in the interest rate environment reduced net reinsurance finance expense to $11.6 million from $12.5 million.

Africa Re’s investment portfolio generated a net investment income of $17.5 million in Q1 2026, compared with $22.0 million in Q1 2025. Investment and other income under IFRS 4 amounted to $16.6 million, down 23.9 percent year-on-year. The decline was largely attributable to capital losses on listed equities and bonds, whose valuations were adversely affected by geopolitical tensions in the Middle East.

Notwithstanding this short-term volatility, the Corporation expects market conditions to normalize over time and remains focused on preserving value through disciplined asset allocation and prudent risk management.

Africa Re maintained a strong balance sheet position in Q1 2026, with total assets increasing to approximately $2.191 billion from $2.167 billion at year-end 2025. Shareholders’ funds increased marginally to about $1.398 billion, reinforcing the Corporation’s strong capital base and financial resilience. Total liabilities stood at approximately $793.3 million, compared to $770.4 million at year-end 2025. The Corporation therefore entered the remainder of the year with solid capitalisation, ample liquidity and continued capacity to support clients across its markets.